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Philips sells PCB unit to Jabil

Calcutta, Aug. 28: Philips India Limited (PIL) has sold off its printed circuit board (PCB) assembly unit at Pimpri in Pune to Jabil Circuit Inc. for Rs 23 crore.

The company’s printed circuit board assembly business which employs about 150 people, recorded a turnover of Rs 63.2 crore for the year ended December 31, 2001. The company said the entire workforce will be absorbed by Jabil.

This decision follows the announcement made today by Royal Philips Electronics, the parent company of PIL, regarding an agreement with Jabil Circuit Inc. Under the agreement, Jabil will acquire most of Philips’ contract manufacturing services (PCMS) which includes the assembly of printed circuit boards.

Jabil Circuit is one of the largest electronic manufacturing services (EMS) providers in the world. It manufactures for companies in the automotive, computing and storage, consumer, instrumentation and medical, networking, peripheral and telecommunications sectors world-wide.

Commenting on the proposed divestment, Philips India managing director and CEO K. Ramachandran said, “Philips has for some time now been concentrating on its core business. Fitting in with this philosophy, Philips announced last year that it would transform its contract manufacturing services into a separate entity that can address both the internal and external EMS markets.”

Royal Philips has sold off the world-wide PCMS operations at a consideration of euro 235 million. Completion of the transaction, which is subject to customary consultation procedures with trade unions, workers and clearance by the competition authorities, is expected to take place later this year.

Under the terms of agreement, Jabil will take over the management of manufacturing operations on three continents, including sites in Austria, Belgium, Brazil, China, Hungary, India, Poland and Singapore.

From these locations, Jabil will continue to provide key components for the manufacture of a wide range of Philips products, including televisions, DVD and audio systems, storage and display products and set-top boxes under a four-year 4-billion euro product-supply agreement.

Jabil will provide the design and engineering services, new product introduction (NPI), prototype and test services, procurement, PCB assembly and final assembly and integration. The agreement will also include outsourcing requirements for additional PCMS customers outside Philips.

PCMS, with Philips Consumer Electronics as its largest customer, has grown from a specialist in printed circuit board assembly into a full service provider addressing both the internal and external EMS markets as a stand-alone Philips business.

Now among the top 10 contract manufacturers world-wide, PCMS offers a broad range of services ranging from design, development and engineering to full-scale manufacturing and customised supply chain management.

“This agreement follows our earlier announcement to look for a strong partner for PCMS, in line with our strategy to focus on selected activities which fully support the long-term ambitions our consumer electronics division, and the industry trend towards outsourcing,” Philips’ board member Gottfried Dutine said.

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